Nasdaq 2017 = Dow Jones Industrial Average 1950s? Ultra bull market ahead?

Looking back it wasn't surprising that the US stock market would enter a correction at the Nasdaq 5000 range.  This was the previous year 2000 top (~5200).  Breaking through this level required more conviction on behalf of the market as it signified the Nasdaq was finally leaving the dot.com bubble top behind it.  Market watchers have been focusing on Dow 20000 and S&P500 2400 but I think the Nasdaq is the index to watch.

After the 1929 top, the Dow finally reached new ATHs in the early 1950s AFTER which a 18 year bull market followed until concluding in 1968.  The post 2000 Nasdaq has a very similar chart to the post 1929 Dow.  Some differences being that consolidation in the Nasdaq post 2000 was more constructive and shorter in duration than Dow consolidation during the Great Depression.  From absolute top to bottom the Nasdaq corrected less than the Dow and reached new ATHs sooner.  One can suggest that the modern Nasdaq has shown more resilience than the 1930s Dow.  If the Nasdaq follows a similar pattern of Dow 1950 we can expect a long and powerful bull market ahead.

The Way Forward For US Banks And The US Financial Sector

The XLF is the largest US investment bank ETF.  It's surprising that Berkshire Hathaway (BRK) is its largest holding along with WFC, JMP, C and BAC.  BRK and WFC have been the best performing in the sector by far (BRK owns a large percentage of WFC).

From a technical perspective, the easy money has been made as it has run into significant overhead resistance that was established in the decade prior to the financial crisis.  I think XLF is an excellent long term hold, however, choppy and sideways trading is likely the way forward.

There is still opportunity for upside in more speculative financial issues such as RF, KEY, STI and AIG.  Their long term charts illustrate the tremendous destructive force of the financial crisis, erasing in some cases equity built up over decades.  I generally use call options with issues as speculative as these.

The US financial sector now sits where the DOW did in the 1930s after the 1929 crash.  The waters may still be somewhat rough, but I think it's mostly upside from here.